How do budgeted cost rates motivate the support-department manager to improve efficiency? Show
 Q: Which of the following is true in a bottom-up budgeting approach? Group of answer choices… A: Bottom-Up Budgeting Approach : It is one type of budgeting which starts from Bottom Departmental… Q: A budget represents a target and aiming towards a target can be a powerful motivator. However,… A: “Since you have asked multiple questions, we will solve the first question for you. If you want any… Q: A budget represents a target and aiming towards a target can be a powerful motivator. However,… A: Budgets are the estimated summaries for the costs to be incurred and revenues to be received. They… Q: Evaluate the importance of standard costing in budgeting process within firms A: In Standard costing an expected cost is substituted above an actual cost, while recording accounting… Q: Managers should be closely involved in preparing their responsibility accounting budget. How true is… A: Generally, managers should be involved in preparing their responsibility accounting budget. Q: Why does a company's budget need to be closely linked to the needs of good strategy execution? Why… A: Because insufficient cash and other forms of resources hamper development and inhibit organisational… Q: Which of the following is an example of the planning function of the budgeting process? A. A budget… A: Budgeting process: The process of streamlining the future expenditure process by predicting or… Q: How could cost-volume-profit analysis be used in budgeting? In making a decision about advertising? A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining how any type of… Q: What are the benefits of tying a budget to the overall goals of the company? A: Budgeting is an important part of the business process. Without budgeting a business cannot track… Q: Discuss how the budgeting process in an organisation benefits a functioning standard costing system A: The process of creating a budget is referred to as budgeting. This process involves budget planning… Q: Discuss how the budgeting process in an organisation benefits a functioning standard costing system. A: Standard Costing System In a simple term standard costing system which project actual data of the… Q: Identify the main purpose of a flexible budget for managers. A: Flexible Budget: A flexible budget is a budget that is prepared for different levels of the output.… Q: budget performance is abetter critical than past performance for judging managers" do you agree… A: For judging the current performance we need a benchmark against which we can see and compare and… Q: Discuss one benefit and one challenge a manager might face if using Flexible budgeting A: Advantage: Variable expenses are indicated as rates of deals in flexible budgets. For instance, if… Q: “The difference between practical capacity and master-budget capacity utilization is the best… A: Practical Capacity:Companies adjust the theoretical capacity based on the potential disruptions like… Q: “The difference between practical capacity and master-budget capacity utilization is the best… A: Given statement is: “The difference between practical capacity and master-budget capacity… Q: 1. How does budgeting provide important information to managers and operating personnel? A: Budget is like preparing plan for the future process and it includes how efficiently sources or… Q: Which of the following is not a benefit of budgeting? It allows for coordination between… A: Budgeting is a process to prepare the financial statement by the manager to estimate the… Q: What functional role do management accountants play in the budgeting process? A: A budget is a type of financial plan that is used by managers to estimate revenues and expenses for… Q: Explained how the use of an activity-based costing system could change the results of the budget if… A: Activity based costing is the type of costing in which the costs are estimated according to the… Q: Describe how non output-based cost drivers can be incorporated into budgeting. A: Budgeting: The budgeting is a process of preparing budgets and the evaluation of it to see whether… Q: Which of the following budgeting processes is LEAST likely to motivate managers toward… A: Budget Process: The budget process assists the management by determining standards for the… Q: What is the impact of responsibility reporting and budgeting on an organization? A: A manager's performance is evaluated based on matters that are directly under the control of that… Q: “Budgets meet the cost–benefit test. They force managers to act differently.” Do you agree? Explain. A: A budget is a financial plan prepared by the company for a period. It is prepared to estimate the… Q: A performance measurement tool that integrates an organization’s financial and non-financial… A: Zero-based budgeting - This means making a budget from scratch. The company starts the budget with… Q: Explain the relationship between performance reports and flexible budgeting. A: Click to see the answer Q: Identify the main purpose of a flexible budget for manager A: A flexible budget is an estimate of revenues and expenses created for a budgeted activity level and… Q: What are the major objectives of budgeting? Briefly describe the type of human behavior problems… A: 1. Objectives of budgeting: Anticipation of future financial condition and future needs for funds… Q: Explain why budgets are useful and how management philosophy can influence the budget process. A: Budget is the estimated data which is prepared or estimated in advance, in simple terms before… Q: Explain what you understand by Budgets, Fixed Budgets and Flexible Budgets in the context of control… A: Companies prepare budgets for various reasons such as controlling costs, evaluating performance, or… Q: Which of the following is NOT an objective of the budgeting process? Group of answer choices a -… A: Budgeting is a process to plan about the activities for the business with developing goals so as to… Q: Responsibility accounting means that a manager should be held responsible for those items in the… A: Responsibility accounting: the responsibility accounting is a part of managerial accounting where… Q: The purpose of a flexible budget is: a) To cap discretionary expenditure b) To produce a revised… A: Flexible budget: A flexible budget is a budget that adjusts to the activity or volume levels of a… Q: How does the use of a time-driven activity-based costing (TDABC) system facilitate the preparationof… A: Click to see the answer Q: What steps should be considered if a budget is to be set and later have its results evaluated? What… A: The budget refers to an estimate made for all possible income and expenses, based on past records… Q: How Absorption and Variable Costing, Budgeting and Responsibility Accounting are connected? A: Answer: Absorption and Variable Costing, Budgeting and Responsibility Accounting There is… Q: 1. Why it is important to get input from the sales manager in preparing a master budget? 2. What is… A: Click to see the answer Q: Two standards that are established for evaluating budget performance are the cost standard and the… A: Ans. Cost standard measures deviation between the actual cost and standard cost. Whereas,… Q: Explain the role of budget in management cycle. A: Management: It is an art of getting things done by others. The others include the employees of… Q: Costing information can be used for? a. Budget control and evaluation b. Determining standard costs… A: Costing is process to assign cost to different elements in organisation. Q: Why is the sales budget considered the cornerstone of the master budget? A: Master Budget: The master budget is a collection of budgets that is used by the company for… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
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Why should budgeted cost rates rather than actual cost rates be used for allocating the variable costs of service departments?Each service department should have at least one variable and one fixed cost pool. When allocating costs of service departments, using budgeted cost rates rather than actual cost rates protects the using departments from price changes and inefficiencies in the service departments.
Why support costs are allocated to departments?Benefits of Cost Allocation
Cost allocation provides the management with important data about cost utilization that they can use in making decisions. It shows the cost objects that take up most of the costs and helps determine if the departments or products are profitable enough to justify the costs allocated.
What is conceptually the most justifiable method for allocating support department costs?What is conceptually the most defensible method for allocating support-department costs? Why? The reciprocal method is theoretically the most defensible method because it fully recognizes the mutual services provided among all departments, irrespective of whether those departments are operating or support departments.
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How do budgeted cost rates motivates the support department manager to improve efficiency?
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